In between readying new regions for our GuruFocus Global Membership, GuruFocus has introduced a new feature. Whereas previously users could only search for stocks at 52-week highs and lows, the new feature allows them to screen for stocks and three and five-year highs and lows.
Selecting stocks that are at their multi-year lows can be a fruitful strategy for investing. Numerous investors, such as Robert Rodriguez, who has averaged more than 15% per year in returns over the past 20 years, use this as one path to finding value opportunities.
The screener has other features as well to narrow down your search. First, users can sort these stocks by those that Gurus own, that insiders are buying or that lie outside the U.S. Through the new global feature, they can also be divided up between regions.
You can adjust the narrowness of your search by electing to display stocks that are within 1 percent to 10 percent of their three- and five-year lows.
As an example, we can screen for stocks that are within 5% of their three-year lows and are owned by Gurus. To do so, click the second tab, “3-Year Low Guru Stocks.” Then, below, where it says “Display stocks that are within,” scroll down to 5%.
The screener automatically sorts the stocks based on the number of Gurus owners but to search for larger companies, click on “Market Cap.” The top of the list is then populated with several mining companies. The one with the largest market cap, Newmont Mining Corp. (NEM), appears on the top. Its afternoon price of $44.89 a share is within 5% of its three-year low and according to the chart, 38% off of its three-year high of $72.42 a share.
The second largest market cap company, at $11.22 billion, is Anglogold Ashanti Ltd. (AU). Its afternoon stock price of $29.15 is within 5% of its three-year low, and has experienced a more significant drop than Newmont – it is down 44.9% from its high price of $52.86 a share.
It is also apparent from the chart that the larger market cap companies that are trading near their three-year lows are owned by the greatest number of Gurus, with 11 and 6 owners, respectively. Newmont, with a P/E of 106.2, had seven Gurus sell their shares of the company in the third quarter. Anglogold, with a P/E of 10.9, had just two sellers.
Shifting focus, setting the screener to search stocks in Canada that are within 10% of their three-year lows and have had insider buys yields a shorter list.
Sorting by market cap, the largest, MVC Capital Inc. (MVC), has exhibited relatively little stock price movement in the past three years. Its current price of $12.10 a share is only 2.7% off of its three-year high of $12.44. Three insiders bought this stock, according to the screener, in the past month.
The second stock, FNB United Corp. (FNBN), is 95.4% off of its three-year high, but it has also had a stock split in that time. It has also seen greater insider activity. Five unique insiders bought shares of the company, for a total number of six insider buy transactions in the past month.
About the author:
Holly LaFonWilliam J. DeRosa, Jr. is the General Partner of Anthem Asset Management, LLC is an independent investment management company. He has also served as Director of Equity Research and Senior Portfolio Manager at various buy-side asset management firms. Mr. DeRosa is a Chartered Financial Analyst and is a member of The CFA Institute.